EUR/CHF Retraces Surge as Traders Look to Swissie as Safehaven
EUR/CHF currency pair has dropped lower falling more than a big figure before finding support near 1.0420, following Thursday’s surge. The natural safe haven appeal of the franc appears to have been boosted ahead of the crunch-weekend for Greece. The decline in EUR/CHF unwinds the gains seen after Swiss National Bank Chairman Jordan said that the franc remains significantly overvalued, and that the central bank stands ready to intervene in the FX markets if needed.
EUR/CHF remains near to the half-way mark of the range that’s been seen over the last three months and most do not envisage much likelihood of SNB intervention at these levels and with Greece’s fate yet to be determined.
ECB left Greek ELA assistance unchanged. The central bank is reviewing ELA assistance on a daily basis now and Draghi suggested that the ECB will allow ongoing funding as long as there is a bailout agreement in place. With the current program running out on June 30, that could be the cutoff point unless there is a bailout extension.
Saturday night is not the next deadline where the Greek negotiations are really over. Merkel earlier also indicated that Saturday’s Euro group meeting is Greece’s last chance. Greece meanwhile said Tsipras will meet Hollande and Merkel again Friday, likely to try and play the Russia card. Varoufakis meanwhile once again repeated his mantra that Greece is doing all the work and that it’s up to the institutions to join the party. Nothing new there and officials may need to focus on a Plan B.
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